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Income Tax Appellate Tribunal, MUMBAI BENCH “J” MUMBAI
Before: SHRI JOGINDER SINGH & SHRI N.K. PRADHAN
ORDER PER N.K. PRADHAN, A.M. This is an appeal filed by the Revenue. The relevant assessment year is 2012-13. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-1 [in short ‘CIT(A)’], Mumbai and arises out of the assessment completed u/s 143(3) of the Income Tax Act 1961, (the ‘Act’).
M/s Sonata Information
The grounds of appeal
read as under:
1. On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in allowing service charges of Rs.15,51,25,076/- incurred for the services rendered by its holding company Sonata software Ltd. (SSL).
2. On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in allowing deputation charges of Rs.17,74,60,170/- in respect of personnel deputed by its holding company SSL.
3. On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in allowing reimbursement of various expenses of Rs.1,11,64,605/- to SSL, its holding company which was disallowed u/s 37(1) of the IT. Act.
3. The assessee is engaged in the business of trading in software. In a nutshell, the facts of the case are that the Assessing Officer made an addition of (i) Rs.15,51,25,076/- being service charges incurred for the services rendered by its holding company SSL, (ii) Rs.17,74,60,170/- of deputation charges to SSL and (iii) Rs.1,11,64,605/- towards reimbursement of various expenses to SSL.
4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). We find that the Ld. CIT(A) has followed the order of the Tribunal for the AY 2009-10 and allowed the appeal filed by the assessee.
5. Before us, the Ld. DR relied on the order of the AO. On the other hand, the Ld. counsel of the assessee supported the order passed by the Ld. CIT(A) and also relied on the order of the Tribunal in assessee’s own case for the AY 2009-10(ITA No. 1424/M/2013), AY 2010-11 (ITA No. 1305/Mum/2014) and AY 2011-12 (ITA No. 4334/Mum/2015).
M/s Sonata Information